Dominion Virginia Power, a subsidiary of Dominion,
asked the Virginia State Corporation Commission for approval
to convert three Virginia electricity-generating power stations
from using coal to biomass, a renewable energy source.

The conversions of the power stations in Altavista, Hopewell
and Southampton County would increase Dominion’s renewable generation
capacity by more than 150 megawatts, enough to power 37,500 homes.
The proposal has strong customer benefits and is part of the
company’s commitment to have 15 percent of its electricity come
from renewable sources by 2025.

The switch to biomass – in this case, using primarily waste wood
left over from regional timber operations – would reduce nitrogen
oxides, sulfur dioxide, mercury and particulate emissions and
meet stringent emissions standards established by the Virginia
Department of Environmental Quality and the Environmental Protection
Agency.

The cost of converting the stations would be about $165 million,
or $55 million per station. The company is requesting an initial
annual rate increase of 14 cents to the monthly bill of a typical
1,000 kilowatt-hour per month residential customer, effective
April 1, 2012. Rate adjustment clauses allow utilities to collect
financing costs over time as projects begin, lessening the larger
rate impact that could occur when power stations go into service.
The conversions would be complete by the end of 2013.

The power stations, which would generate about 51 megawatts each,
are nearly identical. The incremental statewide economic benefit
of converting the stations is estimated to be more than $120
million annually when compared to continued operations on coal,
including the creation of more than 300 jobs in the forestry
and trucking industries. The conversions would also create approximately
160 jobs during the construction period.

The stations have been primarily peaking power units, operating
25 percent of the time. If the conversions are approved, they
would be more economic to operate and, therefore, would be expected
to generate electricity about 90 percent of the time.